Recent research by Unbiased carried out suggests that the average UK consumer will need to work 70 days to cover the interest alone on their debts for 2008.

The numbers of consumers looking for debt help and advice has again increased this year showing that there is trouble ahead for UK consumers due to personal debt levels increasing over the last 10 to 15 years.

The 70 days consumers will need to work to pay off the interest on their personal debt levels is an increase from 44 days last year – showing the increase in the total UK personal debt levels.

The  Chief Executive, David Elm stated: “In the current economic client is has never been more important for people to realise just how much it costs to service their debts and to ensure they have adequate funds available to do so.”

Further research conducted by Credit Action, at the end of January showed that the average UK consumer owed £4,748 in loans, overdrafts and credit card bills.

A new initiative launched by the government to help educate individuals in the UK about their personal finances has been officially launched in the London.

The new personal finance programme called ‘Programme in Personal Financial Planning’ available at the ifs School of Finance has been welcomed by politicians.  The new education programme has been earmarked by a ceremony at the House of Commons.

The aim of the programme is to educate and help individuals who are struggling with their personal debts and free them from the burden of debt; in addition to educating people to avoid future financial problems. The organizers of the personal finance programme hope it will be avialbe throughout the UK in adult education centres.

Noorjahan Rashid, from Tower Hamlets in London commented: “I have only been taking this course for four weeks but have found it life changing.”

“I know about mortgages and interest rates and all sorts of financial things…it’s really given me confidence,” she added.

Many pf the UK’s indebted consumers could have been disappointed recently as the Bank of England opted not top reduce the cost of borrowing.

A new initiative launched by the government to help educate individuals in the UK about their personal finances has been officially launched in the London.

The new personal finance programme called ‘Programme in Personal Financial Planning’ available at the ifs School of Finance has been welcomed by politicians.  The new education programme has been earmarked by a ceremony at the House of Commons.

The aim of the programme is to educate and help individuals who are struggling with their personal debts and free them from the burden of debt; in addition to educating people to avoid future financial problems. The organizers of the personal finance programme hope it will be avialbe throughout the UK in adult education centres.

Noorjahan Rashid, from Tower Hamlets in London commented: “I have only been taking this course for four weeks but have found it life changing.”

“I know about mortgages and interest rates and all sorts of financial things…it’s really given me confidence,” she added.

Many pf the UK’s indebted consumers could have been disappointed recently as the Bank of England opted not top reduce the cost of borrowing.

The UK is currently going through a credit crisis with the UK’s personal debt the highest ever seen.  The stresses of debt are now starting to take their toll on employees at work- known as money sickness syndrome.  Many employers are now taking this issue extremely seriously with HR departments now dealing with personal money matters with employees.

Previously many companies have been slow with this issue but now as the UK debt problems increase employee debt can have effects on company productivity.  A recent new publication, the Thoresen Report shows that employers have a leading role to play in helping individuals and companies should do more to help their employees with any personal debt related issues.

It is arguable as to why an employer should even meddle with the employees’ personal matters but now with the ever increasing personal debt mountain building in the UK it is difficult for employers not to help and is seen as more than just a social issue. 

It has been found that the debt problems affect everyone in all classes and not just those on lower incomes or those of a younger generation.  It is only a matter of time when an employees’ debt problem start spilling into the workplace and starts having an negative impact on performance.

But how can employers help?

It is important for employers to help and educate employees on money matters as well supporting employees in financial matters.

An employer can help thorough an in-house full debt counselling service where it can offer financial management courses or work in partnership with a debt counseling professionals such as Debt Plan Direct who can help employees to ease their worries and reduce the payments. 

Employers should reach out and help their employees.

As the total number of indebted consumers in the UK increase consumers should look at all the debt solutions available to them before going with the first solution available to them such as the drastic solution of the Individual Voluntary Arrangement or further to bankruptcy.

The most debt rich part of the UK is the North East where approximately 18% of adults have unsecured debts of £10,000 or more spread over credit cards, overdrafts and personal loans.

Creditors have realized the increase in loan defaults on their books and now are tightening their lending criteria causing many more loan applications whether unsecured loan or a mortgage to be declined.  The hardest hit consumer is also getting younger in recent times with new research suggesting the average 24 year old now has debts of £16,351 on credit cards and personal loans with the brunt of the debt landing on parents’ shoulders.

Debt Plan Direct case worker, Paul Johnson believes that many people are being denied proper full debt advice and are opting for options such as the IVA, which in many cases is sold to the debtor as the best debt solution when there are other debt solutions such as the less drastic and informal debt management plan.

Paul Johnson one of the most experienced debt case workers at Debt Plan Direct advises that many people do not know where to turn and just go to the first debt solution they come across without weighing up all their options suitable to the debtors individual circumstances.

Many people who struggle with their unsecured debts take out an IVA to alleviate debt problems when there are options such as a debt management plan to help ease the debt burden and have less impact on their credit file.

As many lenders reject loan applications a debt management plan will enable an individual struggling with debts to restructure their monthly payments into a single monthly payment in line with the debtors’ income so the new single payment will be a lot more affordable and realistic.
 
Paul Johnson also advises people to seek help as soon as they feel they may be heading for trouble with their financial situation or if you are currently finding your monthly repayments difficult.